Summary: There has been a distinctly superb performance in 2010, as the economic activity has achieved a sharp rebound, making up for the much severer collapse than other countries during the crisis. However, the Q3 GDP figures suggest that the output has returned to the pre-crisis levels and the recovery pace would likely enter into a slower trajectory in 2011.
Under this broad picture;
1) Growth: I envisage that the economy would post a slower 5.0% growth next year, after expanding by a robust 8.0% this year.
2) Employment and Unemployment Rate: I anticipate unemployment rate falling to 11.9% on average this year, down from 14.0% in 2009. On the other hand, the downtrend in unemployment rate is likely to slow next year in tandem with a softer economic growth. Due to the high rate of growth in population at 1.5% and to the migration of labor force from agricultural sector to the other sectors, I believe that only a limited 0.5 pp drop in unemployment rate to 11.4% can accompany the economic growth that we estimate for next year.
3) Current Account Deficit and External Financing: I expect the deficit to expand slightly to $50.5bn (5.8% of GDP) from an estimated $44.9bn (5.9% of GDP) this year. Recall that Turkey had experienced such large deficits before. However, back then, the long term capital flows was the key financing tool, whereas today portfolio inflows constitute the major source. I believe that unless Turkey’s growth prospects are impaired and the government deviates from the fiscal framework depicted in the Medium Term Program, there is a great deal of chance that Turkey would be upgraded to the investment grade category next year. Such a rating move would improve Turkey’s risk profile, bolstering long term loans and foreign direct investment to the country. In that sense, I am less worried about the towering current account deficit.
4) Inflation: In line with the slowdown in GDP, the inflation outlook shall remain benign. Note that core inflation has been surfacing at a record low 2.5% over the last two months, despite the headline CPI is boosted by tax adjustments and food prices. However, with the partial correction in food prices in November, the annual CPI receded to 7.3%. The CPI is set to keep heading south in the upcoming months, easing even below 5% by February. Such a gigantic fall is linked to the high base year effect and the decline is set to be replaced by a slight uptrend later in the year, bringing the CPI to 6.0% by the end of 2011.
The key assumption that feeds our baseline scenario is that the global economy continues to recover and the risk appetite, which is important for the fund flows, does not get hurt due to additional uncertainty surrounding the global economy. Amidst the ongoing concerns regarding the European debt crisis and the fears that it may spread to bigger members, the delay of the fiscal consolidation in the U.S. may significantly hinder the internal and external rebalancing acts that are needed for a strong, balanced and sustained world recovery (*). This sluggishness has so far thwarted a strong and balanced post-crisis recovery and created uncertainty regarding its sustainability.
(*) Internal rebalancing: When private demand collapsed, fiscal stimulus helped alleviate the fall in output. But fiscal stimulus has to eventually give way to fiscal consolidation, and private demand must be strong enough to take the lead and sustain growth. External rebalancing: Many advanced economies, most notably the United States, which relied excessively on domestic demand, must now rely more on net exports. Many emerging market economies, most notably China, which relied excessively on net exports, must now rely more on domestic demand. “ World Economic Outlook, October 2010, foreword by Economic Counsellor Oliver Blanchard.
Hiç yorum yok:
Yorum Gönder